County could raise your property taxes

Wednesday

The swanky new high school campus taking shape near Cramerton looks impressive to passers-by.

But it’s one of the main reasons, yet another year, that Gaston County Manager Jan Winters has recommended raising the property tax rate.

Winters unveiled his 2014 budget proposal to county commissioners last week. They will hold a work session and public hearing on the budget at 6 p.m. June 13 at the Gaston County Courthouse, prior to voting on a new spending plan.

Here’s a run-through of some of the basics of Winters’ proposal, and the options before commissioners:

What kind of tax increase is suggested?

Winters has called for a 5.4-cent tax hike. That would increase Gaston County’s tax rate to 88.9 cents per $100 valuation.

The rate was as high as 89.3 cents per $100 valuation a decade ago. Commissioners have held it flat at 83.5 cents since last reducing it in 2008.

But the county also hasn’t had a property revaluation since 2007. That means landowners are paying taxes based on outdated values.

With a 5.4-cent increase, Winters would suggest balancing the budget using a smaller amount of the county’s savings account. That would allow that “emergency fund” to stabilize.

Without any tax increase, more savings would have to be used, dropping the fund to a dangerously low level, he said.

For a person with a $125,000 home, the increase would require $67.50 more in county taxes. Throw in a car valued at $25,000, and the taxpayer would have to cough up an additional $13.50.

Overall, the person with $150,000 in property would pay the county $1,333.50 in taxes, not including any city or fire district tax they would owe.

Why is a tax hike necessary?

Winters says the pressure of bond debt is bearing down, stemming from voter-approved measures in 2006 and 2007. The county has issued more than $100 million in bonds since then to benefit Gaston College and Gaston County Schools.

The vast majority of that money has gone to build Stuart Cramer High School in Cramerton, which will open this fall. At the time voters approved the bonds, the county said it would eventually necessitate a 10.5-cent tax increase.

Every spring for several years now, Winters has recommended raising the tax rate. Commissioners have declined, instead choosing to balance the budget with savings.

Winters said they can’t get away with that any longer.

“We bought time, but we haven’t seen a strong enough economic recovery,” he said. “We’re at a point where there’s no more (savings) we can use to buy time.”

New costs, new challenges

The county’s budget crunch is partially a result of state actions, which are passing along $3.5 million in new expenses to the county, Winters said.

State lottery proceeds are expected to decrease by about $1.6 million next year. State changes in the way unemployment insurance is paid, and in the retirement rate, will increase Gaston County’s costs by about $1 million, Winters said.

Other changes adding to the total have to do with lost Medicaid revenues, and increased costs of maintaining Gaston College, he said.

The county is facing other hurdles as well, such as employee health insurance costs that continue to rise.

Would there be layoffs?

With the recommended tax increase, the county would cut seven full-time positions and one part-time position in the newly consolidated Department of Health and Human Services. The employees to be laid off work in Children and Family Services and the Energy Assistance Program. With a tax increase of less than 5.4 cents, or none at all, more layoffs across the board would be necessary, Winters said.

No layoffs are expected in public safety. Twelve Gaston County police officers will no longer be needed in Bessemer City, since the town will begin overseeing its own law enforcement again July 1. But through retirements and attrition elsewhere in the department, Winters believes those 12 officers can be shuffled into new positions elsewhere in the county.

What about public education?

Winters recommends increasing the operating budget for Gaston County Schools by more than $1.2 million to cover the new costs of the new high school opening. The school system has requested an $11.18 million increase.

What if the county doesn’t raise taxes?

In his budget proposal to commissioners, Winters acknowledged they may not be willing to raise taxes. If they don’t, he recommends they look for an equivalent amount of reductions, which would need to total $7.5 million.

To achieve that, Winters said the county would need to revisit options such as closing all of the branch libraries, closing the Gaston County Museum in Dallas at least three days per week, and eliminating funding for the Gaston County Senior Center.

“All of these programs are very important to our citizens, but these reductions must be discussed since we are facing a very serious financial situation,” Winters said.

His recommended cuts would also eliminate 7.5 positions from the newly consolidated Health and Human Services Department — specifically in the Energy Assistance Program, and Children and Family Services division.

But for the most part, commissioners will navigate the budget in deciding what does and doesn’t get cut.

You can reach Michael Barrett at 704-869-1826 or twitter.com/GazetteMike.

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